In 2006 the Unlawful Internet Gambling Enforcement Act (UIGEA) was enacted, which attempted to dose the US market, making it illegal to transfer funds relative to online gambling. The legislation, however, limited the definition of the term “bet or wager” to exclude fantasy or simulation sports games provided: (1) all prizes and awards are established and made known to participants in advance of the game or contest; (2) value of the prizes or awards are not determined by the number of participants or amount of fees paid by participants; (3) winning outcomes reflect the relative knowledge and skill of the participants and is determined predominately by accumulated statistical results of the performance of individuals in multiple real world sporting or other events; and (4) no winning outcome is based on score, point-spread or performance of any single real-world team or any combination of such teams, or solely on any single performance of an individual athlete in any single real-world sporting or other event.
After an initial hit in revenues the industry turned around and has exhibited steady growth. In fact, in 2009 the online gaming industry in the United States alone was estimated at over $5 billion annually and over $20 billion annually worldwide. Current estimates suggest that the U.S. share of online gambling has more than tripled, with worldwide online gambling approaching $50 billion annually. It is estimated that the U.S. sports betting market is approximately $7 to $11 billion annually.
Currently there are a number of online platforms that enable gambling and wagering activities. To date this online gambling industry generally consists of online poker rooms and tournaments, online sports betting and online casinos.
Recently there have been reports of preliminary talks politically about taxing the online gambling industry instead of banning it, perhaps spurred forward by record budget deficits in many countries across the globe. Therefore, it would be desirable to have an online gambling and wagering system that enables fantasy sports gambling/wagering while still complying with the UIGEA. Furthermore, it would also be desirable to have an online gambling and wagering system configurable to expand beyond the scope of the UIGEA should legislation be enacted in the United States that enlarges the scope of legal activities. Therefore, there currently exists a need in the industry for an online gambling and wagering system that allows interested individuals to place bets on a variety of fantasy sports related outcomes.